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Dubai: National Bank of Abu Dhabi (NBAD), the biggest lender in the UAE, is 'actively' considering merger opportunities following the recent decision by two Dubai-based banks, National Bank of Dubai and Emirates Bank, to merge.
"I think that now that it's happening in Dubai we are reviewing options. This is under active consideration," NBAD's chief executive Michael Tomalin said yesterday.
According to A.T. Kearney, a leading management consultancy, mergers tend to occur when the margin for organic growth is extremely tight, thus forcing participants to seek out external acquisitions instead, but the banking markets in the Gulf have witnessed unprecedented growth and profitability. Banking assets per capita are still relatively low in most Gulf countries, leaving ample room for growth for all participants. Thus the factors that normally set off mergers are conspicuously absent.
"We examined four areas that typically point to industry consolidation and found little evidence that a merger wave will occur in the GCC banking industry," said Dr Dirk Buchta, vice-president and managing director, A.T. Kearney, UAE.
- With inputs from Bloomberg
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